Currency Update - Monday 27th May 2019

AUD

AUD enjoyed a positive end to last week, actually closing higher against most majors. In the absence of local economic data, AUD benefitted from US weakness as well as UK Prime Minister May's resignation. The week ahead kicks off in earnest on Thursday with the release of Building Approval figures and Private Capital Expenditure numbers. Until then, AUD will continue to be driven by risk sentiment, namely the ongoing US/China trade negotiations (which have seemingly all but stalled) and the process to replace May with someone capable of reopening Brexit negotiations. With plenty of risk already present in markets, if headway is made on either of these fronts can AUD get a lift? Friday's Chinese Manufacturing PMI will also be one to watch.

USD

AUD opens this morning at 0.6930 after a solid recovery late last week as a result of worse than expected US Core Durable Goods figures, the numbers for April declining by 2.1%, down from a negatively revised 1.7% and worse than expectations of -2.0. With markets thinning out in the lead up to the US long weekend (Memorial Day), USD continued to give up gains made earlier in the week. The highlight of the US data calendar this week will be Prelim GDP figures on Thursday night, followed by a raft of mid-tier data on Friday night. Resistance to further AUD gains is likely to form around 0.6940/50, before the psychological 0.7000.

EUR

AUD opens marginally higher at 0.6184 this morning after a generally quiet Friday session. AUD perhaps benefitting to a degree from the announcement of May's resignation, however the EU had already dampened expectations that the Withdrawal Agreement including the contentious Northern Ireland backstop could be changed under a new PM. No data from the Eurozone tonight and with Germany and France both taking holidays on Thursday it's a quiet data week, the highlight being German Preliminary CPI m/m on Friday evening.

GBP

AUD opens marginally higher at 0.5448 in the wake of UK PM May's resignation, the GBP unable to capitalsie on better than expected Retail Sales m/m figures (0.0% atual vs -0.3% expected). The UK and the US are both enjoying holidays todays, so market are relatively thin and reaction to the UK leadership change so far has been relatively muted. May's resignation was also widely expected with support in her ability to negotiate Brexit irreparably damaged and time before EU's new deadline waning fast. Boris Johnson (BoJo) is firming as the favourite replacement, his statements over the weekend saying that the UK must be prepared to walk away with no deal doing the GBP no favours. The economic data is thin for the UK this week but the contest for the Prime Ministership will take center stage.

NZD

AUD opens flat at 1.0573 this morning after both Antipodean currencies were the major beneficiaries of US weakness and the collapse of the UK leadership over the weekend. AUDNZD has traded within 100 points over the last fortnight with neither currency able to take the ascendancy. Plenty of data due for release in NZ this week with ANZ business Confidence and the RBNZ Financial Stability Report (both Wednesday) and The Annual Budget (Thursday).

Today’s data

AUD:

  • No Data 

USD:

  • Holiday

EUR:

  • No Data 

GBP:

  • Holiday 

NZD:

  • No Data 

CNY:

  • No Data

FX Corp